The Nigerian House of Representatives has directed the Federal Inland Revenue Service, FIRS, to refund the sum of 4.6 billion Naira, about 15.1million Dollar to the country’s Capital Territory Internal Revenue Service, FCT-IRS, being two percent over-deduction.
The amount was overcharged as cost of collection deducted from the 117 billion Naira, 383.7 million Dollar, tax revenue realized between 2015 and 2019.
Chairman of House Committee on Public Accounts, Mr. Wole Oke issued the directive while ruling on the petition against FIRS adopted by the House.
According to the petitioner, FIRS deducted 4% of the total sum of N117 billion collected on behalf of FCT-IRS between 2015 and 2019 through the office of the Accountant General of the Federation, against the agreed 2% as cost of collection in the Memorandum of Understanding (MoU) signed by both parties.
Mr. Oke argued that it was wrong for the FIRS to take part of the money belonging to the FCT-IRS in breach of the MoU signed by both parties.
“Our ruling will be that the Chairman of the FRIS should refund the 4 percent taxes collected due to the FCT-IRS.
That the Chairman, FCT-IRS, if you are still in need of the services of FRIS, due process should be followed and engage FIRS and pay them properly,” he emphasized.
Mr. Oke observed FCT-IRS is entitled to 5 percent of the total tax revenue generated in accordance with the FCT-IRS establishment Act.
While responding to questions from the lawmakers, Chairman, FIRS Babatunde Fowler said that FIRS takes 2 percent of total tax collected as cost of collection rendered to FCT-IRS.
He explained that FIRS is responsible for the payment of salaries of 170 staff deployed on secondment to FCT-IRS throughout the period under review, apart from the accommodation and other logistics service rendered to FCT-IRS.
The FIRS Chairman who argued that the agreement which started with 4 percent was renegotiated to 2 percent last year, said: “we support other States IRS but for FCT, we have given them buildings, logistics and staff, even this 2 percent is not enough to cover the cost.
We cannot continue to support them this way, I may be forced to pull out all our staff and support which will have negative impact on revenue generation in the FCT.”